Understanding The Concept of ACH Payment Invoicing
During challenging times like these, competition amongst small and growing businesses is intense. As a business owner, a lot is likely on your mind as you push to provide clients with the best possible experience. You’re also committed to sustaining quality while likely keeping to a modest budget.
However, with the focus split across so many different areas, one aspect that’s frequently overlooked is receiving payments. Fortunately, there’s a transaction platform that can seamlessly expedite payments with minimal costs.
What Is ACH?
ACH, short for Automated Clearing House, is a system of electronic bank transfers. The network connects all operational financial institutions in the US. This allows a business to transfer money from one account to another regardless of which financial institution the account belongs to.
You can collect this payment type via the payment gateway of any popular accounting software. Once you’ve connected your account, you can make use of easy bank transfers with limited technical requirements.
Moreover, integrating this solution gives clients the option to make payments via direct bank transfers. With ACH payment invoicing, your clients can make and record deposits digitally. When listing the method on their invoices, your clients will also be required to validate their account.
The accounting software can verify your client’s account details on your behalf. It’ll authenticate the account, and approve or reject the transaction depending on the availability of funds.
How ACH Works
These electronic payments are processed within the Automated Clearing House network. A centralized system directs these payments between different financial institutions with the final destination being the recipient’s account.
Both payers and recipients can benefit from these payments given the associated fees for transfers are as low as 0.50% in addition to a small flat fee, even for larger transactions. Not only are payments faster and less costly, but electronic transactions also come with the bonus of automated recordkeeping.
Additionally, employers can easily pay wages to their employees with direct deposits. Similarly, consumers can clear utilities from checking accounts electronically. According to figures compiled by the National Automated Clearing House Association in 2018, US transaction volumes reached over $23 billion in ACH payments alone.
Why You Should Use ACH
There’s much more to this system than faster deposits. You should opt for bank transfers and ACH payment invoicing to take advantage of the following benefits.
Streamline The Workload By Going Paperless
Think about it. Checks are simply too much work given today’s operational exigencies. After waiting for their approval and delivery, they must be deposited into your account and cleared. The record must also be fed manually in your books.
Now, you can easily bid farewell to all of this drudgery thanks to ACH payment. Funds are directly deposited into your account, and the invoicing software can mark it instantaneously for swift recordkeeping.
Clients Want To Minimize Effort
You aren’t mistaken if you sense that clients don’t want to handle large payments with checks. Clients are also inclined to process transactions electronically whenever possible. By going digital, you can bid adieu to paperwork, the fumbling over trifling to-dos, and never-ending manual account reconciliation.
Allowing your clients greater flexibility in payment methods helps to build your brand’s reputation as savvy and legitimate.
Save Hard-Earned Money
Online transaction fees for many other payment platforms can quickly stack up, even for promising fintech solutions like SquareUp, Stripe, and PayPal. With a surcharge of as little as 0.5% in addition to flat fees per transaction and monthly fees, you can still bag larger deposits and save on fees as soon as your clients hit send.
The Bottom Line
If banking most of your hard-earned money is your financial plan this year, then ACH is the way to go. With ACH payment invoicing, you can facilitate fast, affordable, and effortless deposits that go a long way towards reducing manual processes while delivering added convenience for you and your clients alike.